Breast cancer developed in familial BRCA1 mutation carriers bears striking similarities to sporadic basal-like breast tumors. The mechanism underlying the function of BRCA1 in suppressing basal-like breast cancer remains unclear. We previously reported that the deletion of p18(Ink4c) (p18), an inhibitor of G1 cyclin Ds-dependent CDK4 and CDK6, stimulates mammary luminal progenitor cell proliferation and leads to spontaneous luminal tumor development. We report here that germline mutation of Brca1 in p18-deficient mice blocks the increase of luminal progenitor cells, impairs luminal gene expression and promotes malignant transformation of mammary tumors. Instead of the luminal mammary tumors developed in p18 single-mutant mice, mammary tumors developed in the p18;Brca1 mice, similar to breast cancer developed in familial BRCA1 carriers, exhibited extensive basal-like features and lost the remaining wild-type allele of Brca1. These results reveal distinct functions of the RB and BRCA1 pathways in suppressing luminal and basal-like mammary tumors, respectively. These results also suggest a novel mechanism--causing luminal-to-basal transformation--for the development of basal-like breast cancer in familial BRCA1 carriers and establish a unique mouse model for developing therapeutic strategies to target both luminal and basal-like breast cancers.